PulteGroup Reports 1.7% Increase in Net Income in Q3

PulteGroup, an Atlanta-based homebuilder, has announced a 1.7% rise in net income for the third quarter of this year. Despite the impact of rising interest rates, tight supply has contributed to higher average selling prices and new orders for Pulte's homes.

Financial Results

• Net Income: PulteGroup recorded a net income of $638.8 million, or $2.90 per share, for the quarter ended September 30th. This is an increase from $627.9 million, or $2.69 per share, in the same period last year.
• Exceeding Expectations: Pulte's per-share net income for Q3 surpassed the average Wall Street estimate of $2.83 per share, as reported by FactSet.
• Revenue: Third-quarter revenue saw a growth of 2.8%, amounting to $4 billion. However, this figure falls slightly short of the average analyst expectation of $4.05 billion based on a FactSet poll.

Strong Growth in New Orders

PulteGroup witnessed a significant surge in net new orders, experiencing a year-on-year increase of 43%. By the end of September 30th, Pulte had an impressive backlog of 13,547 homes with an estimated value of $8.1 billion.

Positive Trends in Selling Prices

The average selling price of Pulte's homes also saw improvement, rising to $549,000 compared to $538,000 in the previous year.

CEO's Perspective

Ryan Marshall, Chief Executive and President of PulteGroup, acknowledges the challenges posed by high interest rates but emphasizes that the desire for homeownership remains strong. He also highlights the limited supply of houses as a contributing factor to the market dynamics.

Share Buyback

During the third quarter, PulteGroup repurchased shares worth $300 million.

Market Conditions

While the demand for used homes has declined, the new homes market has remained relatively robust. Homeowners are hesitant to sell their properties and face significantly higher mortgage rates.